The 2025 Louisiana legislative session brought significant changes across property, sales, inventory, and severance taxes, alongside updates to economic development initiatives. These moves aim to modernize tax policy, improve competitiveness, and support job creation, each with varying impacts on taxpayers, local governments, and businesses. Here’s what passed, what’s next, and how it could affect you.
Credits & Incentives
Lawmakers advanced several initiatives to strengthen Louisiana’s economic development. HB 507 by Rep. Emerson creates the High Impact Jobs Program, a reimbursable grant that rewards companies for creating jobs that pay above the parish average wage and offer basic health benefits. HB 461 by Rep. McFarland allocates $150 million to the newly created Site Investment and Infrastructure Improvement Fund, which will support infrastructure upgrades for economic development sites statewide. The Louisiana Department of Economic Development (LED) will manage the fund and issue regulations. Finally, SB 161 by Sen. Mizell reorganizes LED into the Office of Economic Development and establishes the LED Innovation Fund to attract high-impact projects. These bills await the governor’s final action.
Sales and Use Tax
Lawmakers passed several bills to clarify changes made during the recent Special Session and reform the state’s sales and use tax system. Most notably, HB 578 by Rep. Emerson restores exemptions that were unintentionally repealed, clarifies statutory language, and adds new exemptions, including for digital products used for the operation of commercial vessels, the lease or rental of motor vehicles, and various activities for non-profit organizations. SB 162 by Sen. Reese expands the definition of “dealer” to include those doing business in Louisiana through virtual or economic means and allows remote sellers to claim the local vendor’s compensation deduction if they file timely returns. It also designates marketplace facilitators as dealers once their sales exceed $100,000 annually. HB 654 by Rep. Beaullieu moves Louisiana closer to tax uniformity by requiring all new exemptions and credits to apply equally at the state and local levels.
Inventory Tax
Lawmakers advanced major changes to how Louisiana taxes business inventory. HB 366 by Rep. Deshotel allows parishes to exempt inventory from ad valorem taxes or reduce its taxable value. Parishes that make the exemption permanent will receive a one-time payment from the Revenue Stabilization Fund but could face long-term revenue losses. This amendment must be approved by Louisiana voters in an upcoming election on November 3, 2026. At the state level, SB 65 by Sen. Foil accelerates the repeal of the inventory tax credit for C-corporations to July 1, 2026, extends the repeal to trusts and estates, lengthens credit carryforward to ten years, and clarifies credit application. Parishes will balance business tax relief with potential revenue impacts.
Property Tax
Louisiana lawmakers debated several proposals to expand the homestead exemption and raise the income limit for the special assessment level, arguing that current thresholds no longer reflect inflation. Most of these efforts failed; however, the legislature did pass House Bill 300 by Rep. Mack, which raises the income cap for the special assessment level from $100,000 to $150,000. Lawmakers added a key provision to the bill requiring local taxing authorities, not other taxpayers, to absorb the cost of the change. Voters will decide the measure at the statewide election on November 3, 2026.
Severance Tax
To boost oil and gas investment, the governor signed Act No. 295 (formerly HB 600 by Rep. Geymann), which cuts Louisiana’s severance tax rate on oil from 12.5% to 6.5% for wells completed after June 30, 2025, and lowers rates for oil and gas produced from stripper, incapable, inactive, and orphan wells. To offset the revenue impact, the governor also signed Act No. 284 (formerly HB 495), which reduces the horizontal well exemption period from 24 to 18 months. The two acts are legally tied and intended to work together to be revenue-neutral while enhancing Louisiana’s competitiveness in energy development.
How KE Andrews Can Help
With sweeping changes across severance, property, sales, and inventory tax policy in Louisiana, businesses will need to navigate new compliance requirements and plan for both short- and long-term tax impacts. Whether you’re an energy company evaluating the effects of the new severance tax rates, a manufacturer assessing inventory tax shifts, or a real estate investor keeping up with exemptions, KE Andrews is here to guide you.
Our team of experienced consultants specializes in helping companies understand evolving legislation, uncover incentive opportunities, and minimize tax liabilities.
Contact us today to assess how these changes affect your business—and to make sure you’re positioned to take full advantage of Louisiana’s updated tax landscape.
